demco .org DEM

CO

2013ANNUAL rePorT

An everydAy commitment to

ensure the power is in your hAnds

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demco exists to serve the members/customers through

professionally trained employees providing safe,

reliable and affordable electricity as well as

other high-quality products and services. As a good

corporate citizen, demco is committed to stimulating

the economic growth and prosperity of our area through

ethical conduct and sound business principles.

Our Mission

Contents06 75Th ANNiversAry

16 2013 yeAr iN review 18 emPLoyees

04 PresideNT’s rePorT

12 BoArd of direcTors 15 services

10 commUNiTy

14 ecoNomic deveLoPmeNT

20 fiNANciALs

esT. 1938

2013 saw your cooperative celebrate a milestone that is not easily attainable, to remain viable and strong in an up-and-down economy over the last 75 years. In August of 1938, Dixie Electric Membership Corporation was born to a group of people seeking to better their lives and better their communities. So as we celebrated this momentous anniversary, we not only looked at a successful past - we also looked forward to a successful future.

Your locally-owned electric cooperative has survived through good times and through bad, but as our future nears we see the opportunity to continue to grow. In 2013, we solidified a future that holds a new power contract that will encourage growth and stability. The new all requirements power contract will not only support that growth that is eminent in the communities we serve, but will protect it from the uncertainty of regulations looming in the power production industry. A new contract with a company capable of multiple fuel mixes can help curb the costs associated with these regulations that are being considered.

As we celebrated a solid 75 years, we also looked forward to more opportunities to serve our members. The future may carry with it new and exciting ways to deliver safe, reliable and affordable power, but the mainstay will be the way we do it with an emphasis on our members. We hope to continue to grow, while keeping our high quality of customer service. To achieve this quality and to sustain it for so long has been due to strong leadership through the years. As we continue to lead this cooperative we will do so as those that came before us, with a strong emphasis on our mission and a willingness to serve. As we take a look at the year, it is evident also that we are continuing to grow. Our infrastructure growth has been

planned for the future. As communities continue to grow, we are growing right along with them to provide them with the power necessary to meet their needs; and as an electric cooperative, a successful growth pattern will keep us on the right track to keep costs down for the members we serve.

A review of DEMCO’s 2013 system statistics reflects another solid year. DEMCO’s kilowatt-hour (kWh) sales were $2,112,245,646. The number of members billed increased from 101,601 in 2012 to 103,055 in 2013. Total miles of line in operation showed an average of 8,140 miles by the end of 2012, and by the end of 2013 totaled 8,233.

We are honored as the board of directors to represent the valued membership of DEMCO during this occasion of the 75th anniversary. We are proud to report to you that the dedication of this leadership has led to another strong year and we look forward to representing you for years to come. We hope to continue to deliver to you the quality service that has made history at this electric cooperative. In closing, I am humbled by the invitation of the DEMCO Board of Directors to serve as the President of the Board. It is my pleasure to serve the membership of this cooperative in this capacity. I also want to thank you the members of DEMCO for your continued commitment to this organization and the support you have shown for this board of directors. In service,

Richard Sitman, PresidentDEMCO Board of Directors

John Vranic ceo & general manager Richard SITman Board President

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PresideNT’s rePorT

Still bringing power to the people –one switch at a time.

2013

75 years ago we raised the bar.

It was 75 years ago that an energetic, strong-willed group of folks from right here in southeast Louisiana banded together and developed a plan to bring electricity to the sparsely populated countryside where profit-driven electric utilities refused to serve. All across the region, people living in small towns, villages and farms were denied the modern conveniences provided by electrical power. But the courageous, forward-thinking men and women who formed Dixie Electric Membership Corporation changed that. Because of their tireless efforts and their strong determination to rise above the many challenges that stood in their way, today more than 100,000 DEMCO meters are served with safe, affordable, reliable electrical power. Join us as we celebrate the accomplishments of our founders and as we recognize those who have carried on that early vision through the decades and have worked hard to make DEMCO a leader among the nation’s member-owned electric cooperatives. As we glance back at the past and look forward to the next 75 years, we are reminded what a privilege and honor it is to serve our members and we remain committed to you.

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While some things have changed, others never will. DEMCO continues its everyday commitment to ensure the power is in your hands.

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75Th ANNiversAry2013

Celebrating 75 years of providing power to its members.

75 years ago we flipped our first switch.

In 1938, DEMCO was established as a nonprofit membership corporation.

in 2013, the demco Foundation, through its operation roundup® program, exceeded contributions of over $4 million to demco members in need.

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Dixie Electric Membership Corporation (DEMCO), now the largest electric cooperative in Louisiana in terms of number of meters, was formed in August of 1938. At that time, the cooperative served about 750 members in the three parishes of East Baton Rouge, East Feliciana and Livingston.

1979

In 1979, branch offices in Ascension Parish and St. Francisville were opened, ranking DEMCO among the top six fastest growing Rural Electric Cooperatives in America. At the time, DEMCO served 36,000 members in seven parishes.

An everyday commitment to ensure the power is in your hands.

buildingTeaching growing

As far as our history is concerned you could say that 1938 was a pretty powerful year.

75years

75 years ago we strapped on our boots and powered up.

1938

75 years ago we lined up a few good men.

We strive to teach our communities about safety and energy efficiency and are committed to being your trusted community partner.

At DEMCO, we cherish the opportunity to be a good corporate citizen. We demonstrate our commitment to community in a variety of ways, most notably through employee volunteerism and contributions to such worthy organizations as the Dream Day Foundation, Capital Area United Way, Family Service of Greater Baton Rouge, the Boy Scouts of America, and many more.

As a primary financial sponsor, DEMCO employees donated, from their personal funds, over $60,000.00 in 2013 to the annual Dream Day and Capital Area United Way campaigns. The spirit of giving shines through DEMCO employees in this campaign. In a time of economic uncertainty, the individuals who make up the DEMCO family have not wavered in the annual contributions to these worthwhile organizations. This generosity shows our true cooperative spirit.

DEMCO shows the utmost respect for individuals who choose to better themselves through higher education. In 2013, DEMCO awarded 10 one-year college scholarships to the children of DEMCO members. Furthermore, DEMCO employees served on the planning committee and cooked for the 2013 Volunteers in Public Schools Annual Picnic as well as the 2013 Hillar Moore, Jr. Memorial Golf Tournament to benefit the Mary Bird Perkins Cancer Center. DEMCO also sponsored four high school juniors on an all-expense paid trip to Washington, D.C. through its annual Rural Electric Youth Tour and performed numerous electrical safety demonstrations to students of all ages throughout its service territory.

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commUNiTy2013

75 years of commitment to the community.

Board of directorsdisTricT 4

Steve IrvingVice President

east Baton rouge Parish

disTricT 8

Dennis LottSecretary/Treasurer

Livingston Parish

disTricT 1

Clarence Brock

Ascension Parish

disTricT 2

Ann Samuel

east Baton rouge Parish

disTricT 3

Randy Lorio

east Baton rouge Parish

disTricT 5

Alice Faye Morris

east feliciana Parish

disTricT 6

Glenn DeLee

east feliciana Parish

disTricT 7

Leslie Falks

Livingston Parish

disTricT 9

Daniel P. Berthelot

Livingston Parish

disTricT 11

Joseph Self Sr.

st. helena Parish

disTricT 12

Eugene O. Traylor

Tangipahoa Parish

disTricT 13

Freddy Metz

west feliciana Parish

services

The DEMCO Foundation is a nonprofit charitable organization established to provide financial assistance to DEMCO members in their times of need. Individual assistance as well as college scholarships and emergency assistance are available.

The Dixie Business Center, located in Denham Springs, Louisiana, is a small business incubator which offers consulting, administrative and financing support for new businesses. Office space is also available for long or short-term lease.

DEMCO continued to partner with local and national developers as well as commercial businesses in 2013 and experienced another year of tremendous growth. The economic development successes experienced by the locally-owned electric cooperative were shown through a wide variety of business venues.

To improve the quality of life in the city, DEMCO was selected to provide power to the new YMCA at the Americana Development in Zachary. This was not only an impressive fitness and recreation facility but was the first YMCA in the city.

DEMCO also was called upon to provide the power for the new courthouse in Livingston Parish. The 95,000 square foot facility will house the 21st Judicial District including the District Attorney, Clerk of Court and the Livingston Parish Sheriff’s Office. While still under construction, the facility is anticipated to open in 2014.

Making the best of economic opportunities fits the desires of a company striving to serve its community. Moreover, delivering quality power to our local businesses and commercial account holders is something that DEMCO takes seriously. Consistent investments in infrastructure have provided DEMCO with the quality necessary to not only compete, but to be chosen overits competition to provide growing businesses with the power they need to succeed.

D E M C O F o u n d a t i o n

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ecoNomic deveLoPmeNT2013

Providing safe, reliable & affordable electricity since 1938.

DEMCO began a year-long celebration to commemorate its 75th year. Representatives were found supporting communities throughout DEMCO’s seven-parish service area to honor the commitment of so many to bring power to all members of the locally-owned electric cooperative.

East Baton Rouge Parish Director Randy Lorio, East Feliciana Parish Director Glenn DeLee, Livingston Parish Director Danny Berthelot, Tangipahoa Parish Director Eugene Traylor, and West Feliciana Parish Director Freddy Metz all returned to the DEMCO Board of Directorsas each was re-elected for a three-year term.

The National Rural Electric Cooperative Association called on the DEMCO Cooking Team once again to support the organization in an event before its annual meeting in New Orleans. The team provided its award-winning jambalaya to volunteers from the annual meeting who participated in a service project with Rebuild Together New Orleans.

DEMCO and its employees once again served as the title sponsor for the 19th annual Dream Day Foundation Fishin’ Galore event held at the 3 Bar E Ranch in Clinton, Louisiana. DEMCO employees contributed over $60,000 through payroll deductions, all of which benefited St. Jude’s Children’s Research Hospital.

Elementary school children throughout DEMCO’s service area enjoyed an incredibly entertaining magic show from magician Scott Davis. His illusions were captivating, but with a message that every child was sure to remember. “Making Accidents Disappear” is a high-energy magic show designed specifically for elementary-aged youth and contains detailed messaging to help reduce the risk of accidents involving electricity in the home.

Local high school students Caroline Ball, Josie Jolibois, Patrick Riley, and Omer Wolff each won an all-expense paid trip to Washington, D.C. The four were winners in the 2013 DEMCO Rural Electric Youth Tour essay contest.

DEMCO is recognized by the Louisiana State Legislative body for its commitment and dedication to the communities served within the locally-owned electric cooperative’s seven-parish service territory. Representative Rogers Pope presented the resolution commemorating the honor to representatives of DEMCO.

DEMCO employees pooled personal resources to give back to the community during the holiday season. Along with family and friends, they collected enough new toys and

donations to bring a special Christmas to 13

families in need during this time.

January AprilFEBRUARY MAY

November

MARCH June

December

2013 Year in review

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As part of DEMCO’s efforts to provide safety education to its members, the cooperative sponsored and participated in the Louisiana Safety Council’s Adventures in Safetyland Camp. Campers enjoyed the activity presented by electric cooperative employees throughout the month-long event.

DEMCO introduces new outage software. At demco.org members can now enjoy the upgrade of an additional layer that includes each individual conductor (power line) and its status. A line that is distributing power is green and when it is without power the page will show it as red. This is just another advancement to help serve the membership better.

The ribbon was cut on a brand new community YMCA in Zachary. The facility located in the Americana development was officially opened to the public after the ceremony. DEMCO is honored to provide power to this great facility in this continually growing community.

July August SeptemberDEMCO personnel were special guest speakers at Walker Freshman High as they presented just a small portion of the knowledge and skills necessary to pursue a career in the electric distribution field. This presentation is just a representation of the many appearances made by the cooperative to deliver a message to schools and youth groups throughout the area it serves.

October

Betty AdamsKarl AlbrittonJustin AndrewsJake ArledgeHijah ArmstrongMichael ArmstrongWendy ArmstrongMarc AucoinShinell AultmanKenneth BaileySean BalfantzJason BallardKevin BeauchampJeff BellingtonDebra BennettTroy BergeronJamie BerryTrent BignerJeremy BlouinKenneth Bourgeois, Jr.Brent BradleyDebra BroadhurstDaniel BrooksChase BroussardJulie BurnsNick CarruthGreg CarruthDovie CarterAndy CastelloBeau Caston, Jr.Todd ChauvinMike Chiasson, Sr.Veronica ClaiborneJamie CoatsDonna CodyKevin CommanderJosh ConleayRonnie CorkernPatricia CourtneyEric CrainDaniel CrossJohnathan CrowderRickey CummingsRichard CutrerFred Dabney, Sr.Doug Dalgo, II

Whitley DayDanny DelatteScott DeLeeRobert DeLee, Jr.Paula DixonD.J. DoguetPatrick DonohueGalen DunbarTiffany DunnWade DuplessieMartha DurdenAngie ElseyNorman EnglerVince EstesJeremy FarrielCade FelpsDavid FournetFrank FowlerPenny FrugeHilda GalmonSusan GancarcikCecil GaraudyRhianna GaronTravas GlascockCody GlascockCalvin GozaVernon GrahamAndy GrahamJohn GreenDusty GuarinoStephanie GuidryMichelle GuidryLee GuillotAndy HallAmanda HaneganDarren HarrellPhilip HarrisDarryl HassellChuck HeineRaymond Hill, Jr.Beverly HodgesJimmy HoldenThomas HollandAvesia HollandBilly HollemanAustin Hudspeth

Warren JeffersonLarry JenkinsDavid JewellAndrea JohnsonToni JohnsonDale JohnsonChanon JohnsonKenneth JonesTammy KellyTommy Klein, Jr.Mike KnightChad LaCost, IVDevin LandryChad LandryJan LandryMike Landry, Sr.Jake LaneDavid LatonaJeff LeaKaleb LeeLouis LeeDentory LeeShawn LittleJared LouqueJeff LyonsCheryl MalbroughMelvin MartinChasity McClurePage McClureTheo McCray, Jr.Anita McNealTony McNeeseHaley MeadowsBrian MerrittJohnny MetzPernell MilesSonya MilesScott MillerJosh MillerJustin MiltonRaymond MizellYuan MizellTiffany MooreBen MoreinBubba MunnQuanika Muse

Chad NorredEric OuberRusschelle OverhultzJacob OverhultzPhillip PaceKerri PaganoShawn ParkerJacob ParkerMelvin ParkerMike Parker, Sr.Lori PeekShane PendarvisPaula PerryKelli PersacMark Phillips, Jr.Gina PickeringDaniel PoirrierDonnie PrestJosh PrestridgeJackie Purvis, Jr.Krystal RaymondMatt ReedTerrie ReedWilliam ReilyNakita RicardSandra RichardDonna RoshtoSam RossoRachel RouleRandy RushingLinda SandersNick SaucierAsa ScottArthur Selders, Jr.Fred SelfCorey SharpeLevy SibleyBrandon SimonJared SoileauChuck SpillmanSteven SpringDarren St. PierreJeremy StarnsJulia StarnsWayne StevensonLori Stewart

Raymond Stewart, Jr.Erica SullivanBlake SullivanMissy SumrallPatrick TannerEsther TapiaAgra TempletMarci TempletAaron TerranceMason ThackerWendy ThibodeauxRichie ThomasAlvin ThompsonBuddy Thompson, IIIRusty ToddDavid TuckerKleve TuckerTurk TynesJimmie VarnadoJohn VranicDebbie WalkerJeremy WascomBooker WashingtonDoug WatsonCarl WattsJames WellsCarl WestbrookDarrel WhiteRobby WhiteRoyland WickerCaleb WilkinsonDerrick WillisShelly WintzJohn WoodburnCurtis YaunJoe Young, Sr.Phill Zito

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emPLoyees2013

Bringing power to the community for 75 years.

Utility Plant Electric plant in service $546,945,012 $513,926,186 Construction work in progress 29,857,126 36,455,414 Other fixed assets 4,477,139 4,591,947 581,279,277 554,973,547 Less: accumulated depreciation (133,883,988) (127,411,878) Total utility plant, net 477,395,289 427,561,669

investments and other Assets Investments in associated organizations 9,131,665 8,879,159 Notes receivable, long-term portion 233,760 475,362 Total investments and other assets 9,365,425 9,354,521

current Assets Cash and cash equivalents 695,001 612,734 Restricted cash 3,835,795 ___ Current portion of notes receivable 241,603 241,603 Accounts receivable Consumers (net of allowance for uncollectible accounts 10,251,801 7,819,887

Unbilled revenue 11,114,491 8,918,027 Other receivables (net of allowance of $509,990 in 2013 and in 2012) 4,126,725 7,486,240 Deferred fuel adjustment 3,940,272 3,109,184 Materials and supplies 5,898,218 7,645,178 Prepaid expenses 1,409,845 1,318,582 Total current assets 41,513,751 37,189,538

other Assets

Deferred charges 43,610,869 34,011,156 Intangible, net 800 800 Certificate of deposit-pledged 150,000 150,000 Total other assets 43,761,669 34,161,956

ToTAL AsseTs $542,036,134 $508,267,684

ASSETS 2013 2012

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of $473,525 in 2013 and $450,466 in 2012)

fiNANciALs2013

Growing stronger to better serve you.

equities

Memberships $427,565 $420,980 Patronage 93,421,406 81,912,869 Total equity 93,848,971 82,333,849

Long-Term debt

Notes payable, less current maturities 335,052,773 323,948,363 Deferred interest-RUS notes 2,351,068 3,292,714 Total long-term debt 337,403,841 327,241,077

current Liabilities

Managed overdraft 4,909,472 1,337,336 Current maturities of notes payable 12,750,546 11,325,937 Line of credit 31,957,751 32,417,432 Accounts payable 13,236,771 12,899,547 Consumer deposits 7,703,308 7,432,265 Accrued interest 799,366 861,521 Other accrued expenses and deferred credits 2,182,218 2,483,728 Customer refund 624,336 624,336 Rate moderation plan 3,835,795 --- Total current liabilities 77,999,563 69,382,102

deferred credits and other Liabilities

Accrued post retirement benefits 27,052,600 23,735,900 Accrued vacation and sick pay 5,731,159 5,574,756 Total deferred credits & other liabilities 32,783,759 29,310,656

ToTAL eqUiTies ANd LiABiLiTies $542,036,134 $508,267,684

operating revenue $179,143,475 $167,381.768

operating expenses

Cost of power 95,611,900 93,208,759 Cost of sales 21,878 72,819 Distribution-operations 7,016,230 6,501,792 Distribution-maintenance 13,535,613 18,129,697 Consumer accounts 5,724,181 5,881,872 Administrative and general 8,350,554 8,747,309 Depreciation and amortization 16,487,500 15,614,758 Taxes 4,993,644 4,807,009 Other 2,401,341 2,140,512 Total operating expenses 154,142,841 155,104,527

operating margins before fixed charges 25,000,634 12,277,241

fixed charges

Interest on long-term debt 13,143,470 12,852,112 Other interest 1,030,470 836,900 Total fixed charges 14,173,940 13,689,012 Operating margins (deficit) after fixed charges 10,826,694 (1,411,771)

capital credits 617,715 567,284

Non-operating margins

Interest income 141,997 210,723 Other income (expense) (77,869) (68,310) Total non-operating margins 64,128 142,413 Net margins (deficit) 11,508,537 (702,074)

Patronage capital, beginning of year 81,912,869 82,614,943

PATroNAge cAPiTAL, eNd of yeAr $93,421,406 $81,912,869

OPERATIONS & PATRONAGE CAPITAL

Equities & Liabilities2013 2012

2013 2012

Average Members Billed/Month .................................................................................................................................. 103,055Average Member/Mile of Line .......................................................................................................................................... 12.55Average Miles of Line ........................................................................................................................................................ 8,233Total kWhs Sold....................................................................................................................................................2,112,245,646Average kWhs/Month/Member .........................................................................................................................................1,708Average kWhs/Month/Residential Member ..................................................................................................................... 1,425Average Monthly Revenue/Member ..............................................................................................................................$139.71Total kWhs Purchased........................................................................................................................................2,244,386,386System Peak Demand ....................................................................................................................................................522,281Month of System Peak .....................................................................................................................................................August

System statistics

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